Goldman Sachs: Chow Tai Fook (01929)'s same-store sales growth in the first fiscal quarter is expected to maintain a “neutral” rating

The Zhitong Finance App learned that Goldman Sachs released a research report saying that Chow Tai Fook (01929) released operating data for the first fiscal quarter ending the end of June. Same-store sales in mainland China increased 19.6% year-on-year, in line with the bank's expectations of 20%; same-store sales in Hong Kong and Macau increased by 41.7%, slightly higher than the bank's expected 40% increase. Management is confident that full year guidelines will be met and that the first quarter's performance was better than expected. Goldman Sachs maintains Tai Fook's “neutral” rating, with a target price of HK$13, based on a forecast price-earnings ratio of 13 times for the 2027 fiscal year.

Goldman Sachs pointed out that by product breakdown, weighted gold products outperformed, with same-store sales in mainland China, Hong Kong and Macau increasing by 38% and 63.7% respectively; price-priced gold products fell 1% and increased 13.1%, respectively. Management said that from July 1 to 19, local same-store sales slowed to an increase in the number of units, mainly due to weather factors and the diversion of the World Cup tournament, but there was an improvement in the third week. The performance of price-priced gold products improved in July, benefiting from the stabilization of gold prices and successful products such as the “Wanxiang” series.

The management reiterated the guidelines for increasing the medium to high number of units in revenue for the full year ending the end of March next year. Mainland same-store sales increased by a high number of units, and a low double-digit increase in same-store sales in Hong Kong and Macau. The bank believes that the sustainability of same-store sales growth and whether new products can drive improvements in the pricing product portfolio will be key observation points.